Why Being a Co-Op Can Be a Path To Growth

Being a consumer co-op has worked well for Fair State Brewing Cooperative in Minneapolis, which has expanded well beyond the walls of its home state during its nine years in existence.

“Anyone off the street can walk into our taproom, plunk down some money and become an owner of the company.” Fair State head brewer Joe Wells said. “Coop members can run for and vote for our board of directors, which provides a bit of oversight and checks and balances on what we’re doing.

“Being a member gives people a sense of ownership and place in our taproom, plus they evangelize for our beer a bit out in the open market, which is nice.”

It’s definitely been growing since its debut in 2014. Wells said the lion’s share of its members live a 10-15 minute drive from the Minneapolis taproom, but its distribution includes Minnesota, Detroit and other parts of Michigan, and recently added a number of brewpubs, restaurants and retailers in Chicago.

OATH Distributing handles distribution duties in Michigan and now in Chicago, where Fair State started out self distributing to test the market.

“We have members spread out all over the country,” Wells said. “A fair amount live in Chicago so we weighed adding it in as a market. We dipped a toe with self distributing there for a little while to test the waters because we know it’s one of the most heavily distributed markets in the country and it’s relatively close. Self distribution went great so it seemed like a natural fit to get a distributor and explore the market.”

Wells said finding a distributor when you’re a coop doesn’t differ greatly from how it would for any other craft brewery, but that a couple of factors played into their choice.

“OATH was a natural choice for Chicago,” Wells said. “They distribute our beer in Michigan. It’s a fairly established distributorship. Being in a cooperative doesn’t affect choice too much, but being in a cooperative and having the ideals of a cooperative does weigh on all the choices we make to some degree. We explored our options, and they matched our drive and desires as a company and frankly, they’re really good people to work with. They put in a lot of work moving our beer throughout Detroit and Michigan and it made sense to be one of their anchor brands in Chicago.”

Wells wasn’t one of the founders, having joined about 4 ½ years ago. But he said he liked the cooperative because it was an egalitarian model that gives a voice to people who don’t ordinarily have a voice in the corporate structure.

“We take our members’ direction to heart and make a brewery that they want,” he said. “It’s not a model if you want to bring your pure vision into the world, but it’s a business model for people who want to build a community.”

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